(AP) - Libyans hunting Moammar Gadhafi offered a$2 million bounty on the fallen dictator's head and amnesty foranyone who kills or captures him as rebels

TRIPOLI, Libya - (AP) - Libyans hunting Moammar Gadhafi offered a$2 million bounty on the fallen dictator's head and amnesty foranyone who kills or captures him as rebels battled Wednesday toclear the last pockets of resistance from the capital Tripoli.

While pockets of die-hard loyalists kept up the fight to defendGadhafi, his support was crumbling by the hour, and even hisforeign minister said his 42-year rule was over.

Asked by the British broadcaster Channel 4 if a negotiatedsettlement or safe passage for Gadhafi from Libya were stillpossible, Foreign Minister Abdul Ati al-Obeidi said: "It lookslike things have passed this kind of solution."

Later, Col. Khalifa Mohammed, Gadhafi's deputy of intelligencechief, told Al-Arabiya television that he had defected to therebels.

A defiant Gadhafi vowed from hiding to fight on "until victoryor martyrdom," in an audio message early Wednesday.

Rebel leaders made first moves to extend their political controlto the entire country and set up a new government in the capital.During Libya's six-month civil war, opposition leaders hadestablished their interim administration, the National TransitionalCouncil, in the eastern city of Benghazi, which fell under rebelcontrol shortly after the outbreak of widespread anti-regimeprotests in February.

"Members of the council are now moving one by one from Benghazito Tripoli," said Mansour Seyf al-Nasr, the Libyan opposition'snew ambassador to France.

Still Tripoli was far from pacified, with pro-regime sniperscutting off the road to the airport and other loyalist fighterslaunching repeated attacks on Gadhafi's captured private compound.Four Italian journalists were kidnapped on the highway to Tripoliaround the city of Zawiya, 30 miles west of the capital.

The city's streets were largely empty of civilians. Rebelsmanned checkpoints every few hundred yards, but little else couldbe seen but the debris of days of fighting and weeks of accumulatedgarbage.

Intense clashes broke out in the Abu Salim neighborhood, aregime stronghold next to Gadhafi's vast Bab al-Aziziya compound,the symbolic center of his regime, which the rebels capturedTuesday after a fierce battle. Gadhafi loyalists inside Abu Salimwere firing into the captured compound, rebels said.

Rebels found no sign of Gadhafi after the Tuesday battle for thecompound, but rumors churned of his possible whereabouts. WhiteHouse spokesman Josh Earnest said there was no evidence to indicatehe had left Libya, but rebel officials acknowledged they could notfind him.

"He might be in Sirte or any other place," Jibril said inParis. Sirte, a coastal city 250 miles from Tripoli, is Gadhafi'shometown and a bastion of regime support.

Mohammed al-Herizi, an opposition official, said a group ofTripoli businessmen had announced a $2 million reward for thearrest or killing of Gadhafi. But rebel spokesman Col. Ahmed Banisaid the rebels themselves had only offered amnesty for anyone whokills him or hands him over.

"The biggest prize is to offer amnesty, not to give money," hesaid.

Rebel fighters, who by Wednesday afternoon controlled most ofthe Bab al-Aziziya compound, were using it as staging area foroperations, loading huge trucks with ammunition and discussingdeployments. But they repeatedly faced loyalist attacks Wednesday,with pro-Gadhafi snipers firing on the fighters from tall buildingsin Abu Salim, said Mohammed Amin, a rebel fighter.

He said the rebels had surrounded Abu Salim, home to thecountry's most notorious prison and scene of a 1996 massacre ofprotesting political prisoners, but had been unable to push intoit.

Al-Sadeq al-Kabir, a rebel spokesman, said thousands ofprisoners had been released, many of them political prisoners whohad been held there for years.

He also denied media reports that Gadhafi had offered acease-fire.

The rebels claim they control the Tripoli airport but are stillclashing with Gadhafi forces in the streets around it. AP reporterssaid the road leading to the airport was closed because of heavyfire by pro-regime snipers. One rebel fighter, Khalil Mabrouk, saidmost of the airport was cleared of Gadhafi soldiers, butpro-Gadhafi's forces to the south were firing rockets and shellingrebel positions inside.

Dozens of foreign journalists were released after being heldcaptive for days by pro-government gunmen at Tripoli'sonce-luxurious Rixos Hotel near Abu Salim and Bab al-Aziziya.

The hotel was where rotating tours of foreign journalists hadlived for the past six months, closely watched by governmentminders and taken on approved tours. But it had become a de factoprison after the rebels swept into the city Sunday, with a team ofgunmen refusing to let the journalists leave. As the days tickedby, power outages became near-constant, leaving reporters withoutair condition in sweltering summer heat. Hotel employees fled andthe journalists had to scrounge the hotel for food and water in thefinal days.

Since Sunday, heavy gunbattles have raged all around the hotel,and journalists had to frequently take cover.

One guard expressed surprise when told most of the city was inrebel hands. Finally, as the rebels drew closer, most of the guardsleft, leaving just a pair of increasingly nervous gunmen. Thejournalists were suddenly freed Wednesday, as the InternationalCommittee of the Red Cross stepped in to negotiate their release.

Elsewhere in the city, streets were deserted except for therebel checkpoints, where fighters looked for Gadhafi supporters andsearched cars for weapons. At one checkpoint, one of theonce-ubiquitous pictures of Gadhafi had been laid on the ground socars had to drive over it.

Many buildings were covered in the pro-rebel graffiti that hasappeared over the last few days.

Trash, already a problem in the waning months of Gadhafi's rule,now covers many streets and sidewalks. The shredded remains ofGadhafi's green flags were also scattered across the city.

The rebels also targeted other symbols of the regime, includingthe homes of some of Gadhafi's children.

About 200 people ransacked the beachfront villa of Gadhafi's sonal-Saadi, driving off with four of his cars - a Lamborghini, a BMW,an Audi and a Toyota station wagon, said Seif Allah, a rebelfighter who joined in the looting and took a bottle of gin and apair of Diesel jeans.

After a five-hour gunbattle with guards, rebels also ransackedthe mansion of Gadhafi's daughter Aisha.

In recent years, Gadhafi's six sons had become increasinglyentangled in scandals. Hannibal was arrested in 2008 for beating ahotel employee in Switzerland and al-Saadi also had run-ins withpolice in Europe and a history of drug and alcohol abuse. Thechildren's misbehavior further heightened resentment against theregime.

But even as his 42-year-old regime was crumbling around him,Gadhafi vowed not to surrender. In an audio message earlyWednesday, he called on residents of the Libyan capital and loyaltribesmen to free Tripoli from the "devils and traitors" who haveoverrun it.

Rebel officials are eager to prove they can bring a stablepolitical future for Libya, and that their movement is more than anoften-fractious collection of tribes, ethnicities andsemiautonomous militias.

Mahmoud Jibril, the head of the opposition Cabinet, said aftermeeting French President Nicolas Sarkozy in Paris that rebelofficials were forming a cabinet and that a national congress wouldalso be created to represent the country's cities. That congresswill form a committee to write a new constitution, and a council tooversee elections. Parliamentary elections will come first he said,with presidential elections will later follow.

A new national army will also be created out of the rebelmovement, Jibril said.

The rebels have taken control of much of Libya, sweeping through the country with the help of a relentless NATO air campaign thatincluded including about 7,500 strike attacks against Gadhafi'sforces.

Fighting also continued in areas outside of Tripoli. Jibril saidpro-government forces were shelling a number of southern cities.Residents of the port town of Zwara, about 70 miles west of thecapital, said they had suffered through four days of shelling.

All roads to the city had been cut off, said Sefask al-Azaabi, a29-year-old rebel.

As government forces have been defeated elsewhere, Gadhafi'sforces "take their revenge by shelling our town," he said bytelephone, adding that rebel forces were running low on supplies.

"We are appealing to the (rebel) military council to send usreinforcements or this town will be finished in no time," he said.